On September $30,2012,$ Cullumber Company issued $10\%$ bonds with a par value of $$460,000$ due in $20$ years. They were issued at $98$ and were callable at $105$ at any date after September $30,2017.$ Because Cullumber Company was able to obtain financing at lower rates, it decided to call the entire issue on September $30,2018,$ and to issue new bonds. New $9\%$ bonds were sold in the amount of $$780,000$ at $102$; they mature in $20$ years. Cullumber Company uses straight$-$line amortization. Interest payment dates are March $31$ and September $30.$

$($a$)$

Your answer is correct.

Prepare journal entries to record the redemption of the old issue and the sale of the new issue on September $30,2018.($Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts.$)$

Account Titles and Explanation

Debit

Credit

Bonds Payable

Loss on Redemption of Bonds

Discount on Bonds Payable

Your answer is correct.

Prepare journal entries to record the redemption of the old issue and the sale of the new issue on September $30,2018.($Crea account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No Entr the account titles and enter $0$ for the amounts.$)$

Account Titles and Explanation

Debit

Credit

Loss on Redemption of Bonds

Discount on Bonds Payable

$($To record the redemption of old issue$)$

$($To record the sale of new issue$)$

Prepare the entry required on December $31,2018,$ to accrue interest and amortize the premium on the bonds. $($Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Round answers to $0$ decimal places, e$.$g$.5,275.)$

Account Titles and Explanation

Debit

Credit

Interest Expense

Premium on Bonds Payable

Interest Payable